Jack Shakely
A popular perception about people in Los Angeles is that they’re too busy talking on cell phones, having plastic surgery or doing lunch to think about contributing to their community. But, like so much about Southern California, this, too, appears to be based largely on myth. There are, in fact, strong indications that Angelenos may feel more of a sense of responsibility toward their neighbors than do folks in New York, Chicago and other major U.S. cities.
Late last year, a Field Research Corp. study found that almost three-quarters of the Angelenos it surveyed reported giving to charities within the last year--5% higher than the national average. Their contributions tend to go to local, rather than national, organizations and fund everything from the purchase of textbooks for Los Angeles Unified School District students to job training for homeless parents.
The philanthropy of the people of Los Angeles has swelled endowments at organizations such as the California Community Foundation, the city’s oldest private charity. Its funds have more than tripled in the 1990s, fueled by an unprecedented number of donations made by individuals who call this city home. And, according to the foundation’s director, this philanthropic spurt appears to be forming into a steady stream that bodes well over the long term for charitable organizations and the people who benefit from them.
As head of the California Community Foundation since 1980, Jack Shakely is slowly building a name for his organization, which combines small-to-medium endowment funds from individuals and manages them. In the world according to Shakely, charity is a business. It has a good product, but it has to innovate and create new efficiencies to thrive. The California Community Foundation has done just that, according to management guru Peter F. Drucker, who has praised the organization for spending less than one cent on the dollar in administration costs.
The 58-year-old Shakely, who speaks with a pleasing Oklahoma accent, has big plans for his foundation and hopes to increase its endowment from the current $350 million to $1 billion by the year 2002. The father of a son by a now-dissolved marriage, he plans to remarry this summer; he says he doesn’t intend on slowing down for at least a couple of decades. In a conversation from Philadelphia, where he was meeting with other community foundation administrators, he spoke about the business of charity, the projects he’s most proud of and his sense that the spirit of giving is very much alive in the City of Angels.
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Question: The California Community Foundation’s endowment has grown dramatically during this decade, more than tripling in size. Have Angelenos suddenly become more generous, or is there something else behind your good fortune?
Answer: There has been an amazing creation of wealth in Southern California, and many of the people who participated in it are now getting on in years, and are thinking about giving something back. Many people born just after World War I--the people who came into adulthood around the time of World War II--accumulated an amount of wealth that is unprecedented. These are people who came out to California, maybe bought a house in Laguna Beach for $15,000, and now find that house is worth $3 million. The people who participated in the postwar boom in California are now beginning to die. Many are leaving fabulous estates, many are inclined to give to charity, and that’s how the Community Foundation is growing.
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Q: While that might be good news right now, it might be bad news in the future. A number of studies have shown that the baby boom generation is far less charitable than their parents.
A: I’ve read those studies, and I think baby boomers have been disconnected from charity. But that’s not to say that they’ll always be. There is a maturation going on, and that disconnection is disappearing. In fact, I think, as the baby boomers get older, you may see philanthropy becoming the next big thing.
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Q: Well, then perhaps there’s another bit of common lore that you can skewer, which holds that when it comes to charity, Southern Californians are skinflints. There was a report issued about a year ago which showed Angelenos at the bottom of the barrel among major cities in charitable contributions. Is that a misconception?
A: It is, and I’m happy to dispel that myth. The study you refer to was probably the first time anyone had ever looked at charitable giving across the country, and because of that, it blazed across the media sky. But we recently conducted a Field Research Corp. poll and found that Angelenos actually give 5% more than the national average. They tend to volunteer less, and we think that may have to do with the huge distances people have to travel here. But they do give, and interestingly it’s often not to the big national charitable organizations, but to local groups instead. For instance Dollar For Scholars, which is a big national organization, doesn’t have much of a toehold in Los Angeles, but the Fulfillment Fund, and 100 Black Men and a number of other local charities do. Los Angeles donors tend to be as independent in their giving as in everything else.
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Q: What else did you learn about Angelenos’ philanthropic habits in your study?
A: One interesting thing: Almost everywhere else people placed religious organizations at the top of charities they contribute to. But not in Los Angeles. Here health and human services was No. 1, and religion was a close second. That was quite a surprise.
We also found some surprises in why people give. The No. 1 reason cited was an innate sense that they should be doing something for their neighbors. They also said they liked to give to groups that they had a hands-on understanding of--Angelenos like to roll up their sleeves and actually touch the organization that they fund.
On the other hand, they tended not to succumb to any kind of hard sell. They don’t respond well to telephone solicitations or direct mail. Also interesting was that the classic movie star appeal didn’t work too well with Angelenos. They’re far more likely to give to an organization based on a friend’s recommendation than one coming from a famous person.
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Q: Doesn’t that mean that organizations like yours need to be very creative in their fund-raising, if phone calls, direct mail and star appeals don’t work?
A: We’ve never done any of that, and never would, but we do have to be far more creative. Because of our dynamism in Los Angeles, and our changing demographics, we’re going to have come up with inventive ways of making connections with donors.
One thing we noticed is this: Angelenos like to have projects. They like to go out and tackle a very hard problem; work at it, and then sit back and look at what they did. So, for instance, a program like LA Works, which is very project oriented, is very successful. Whereas some of the more traditional activities, like hospital volunteer programs, are not as successful.
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Q: So far we have been talking about individuals. What’s the state of corporate philanthropy in Los Angeles, and how has it been affected by the resurgence of the economy and by the increasing number of mergers and acquisitions?
A: I’m very optimistic about individual giving--in fact I think we’re about to enter a renaissance of personal philanthropy. But I’m far less sanguine about corporate giving. Because of mergers, there are precious few national organizations headquartered in Los Angeles anymore. I think Arco is probably the only Fortune 100 company we’ve got. . . . Corporations tend to give most in their headquarter cities, and we’ve lost a lot of support in that area.
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Q: And what about the entertainment industry, which has a reputation of being somewhat stingy when it comes to supporting community charities?
A: I don’t think they deserve that. A lot of people in entertainment are very philanthropic--names you know, like Michael and Jane Eisner or Lew Wasserman. But there are a lot of people in that industry who may not be as well known, but consider Los Angeles their home, and are doing their part to support it. I think Disney Hall is a great example of everybody pulling together.
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Q: Which brings us to the question of corporations requesting, or even demanding that their names be placed prominently on the edifices built with their largess. Does that trend trouble you?
A: It does disturb me because, at worst, it sends a message that our institutions are for sale. I think sometimes it’s not so much the corporation that insists on it as it is the over-aggressive fund-raiser who offers it. But the end result is the same. I have no problem with a building being named after a donor. I do have a concern when it begins to appear that the philanthropy is directly connected to the marketing activities of the organization. There are some corporations that have found a way to make this work for the benefit of everybody. For instance, the Ronald McDonald houses. That’s a great program, and I see nothing wrong with it. So I guess it has to do with dignity, as much as anything else.
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Q: Let’s talk specifically about the California Community Foundation. Would you agree that it’s had a fairly low profile, and that the average person in Los Angeles probably has never heard of it?
A: It’s true. We’re actually the oldest public charity in Los Angeles, having been founded in 1915. We’re literally a community of funds--some five hundred funds--most of them a million dollars or less. We manage them all as if they were one, with great efficiency. I think in the last few years we’ve done a better job of getting our story out to the public, and I think that’s at least one reason why our assets have trebled. We’re now bringing in between $60 million and $80 million per year in new money. That’s due to our generous Angelenos, and we compare very favorably with community foundations in New York, San Francisco and other cities.
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Q: What about your foundation appeals to givers, and how do you appeal to them?
A: We’re attractive to donors because of the economies of scale. We can run a fund for a donor at about one-tenth the cost that the donor would pay to run the fund themselves as a private foundation. Also, we understand the nonprofit foundations in Los Angeles. If someone calls and says they want to do something to help people on Skid Row, we know Skid Row and work with the agencies there every day. Another appealing thing is that we’ve been here for 80 years, and we’ll be here for many years to come. When people are creating an endowment they like to think of a certain amount of permanency in it, and we provide them that.
What kind of donors do we get? I would define them as almost rich. Not Rockefeller rich. They tend to be people who moved to California after the war, maybe went to college on the G.I. bill, started businesses, made their money here and now want to leave something behind for their grandchildren.
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Q: And how do you spend this money?
A: Lots of neighborhood revitalization programs. We’ve funded a lot of affordable housing projects, both new construction and rehabbing. We’ve also done a lot in health care, primarily for youngsters who are not covered by insurance. We were one of the first foundations to get involved in AIDS education. Right now one of our challenges is to find jobs for hard-hit constituencies. We’ve been working with LAMP--the Los Angeles Men’s Program--down on Skid Row. They have a program that employs about 30 men in a laundry. Now, 30 jobs may not sound like a lot, but it’s a big deal on Skid Row.
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Q: Because you receive so many grant applications, you must have a pretty good idea about what people are concerned about, or at least what concerned people are concerned about.
A: Yes, and it’s interesting that people here don’t feel that they live in a safe environment, and they want to change that. Education, especially primary and secondary, is a big concern, and there is a recognition that we are not providing adequate tools or a conducive environment for learning. The other big one is jobs--finding meaningful work with dignity.
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Q: How has your foundation been affected by the shift away from largess on the part of the federal government?
A: We’re having to spend more time and effort helping nonprofits find new sources of funding. I suppose of all the groups, the artists are the ones who have really taken it on the chin. We’re making lots of individual grants to artists these days, in part because they’re no longer finding support from the community institutions. I don’t think we’ve really even begun to see the impact yet of many of the federal budget cutbacks.
You know, when you decide to stop painting the barn, the next day you look at it, and it looks the same, and you say, “I got away with that.” But then, who knows what 20 years will bring.